French insurer AXA said Tuesday that it would give its XL unit a cash infusion of about €1 billion (about $1.17 billion) to strengthen its capital position after the business was hammered by coronavirus claims and costs related to natural catastrophes, according to a Reuters report.
The news came after AXA reported an 8% drop in nine-month revenue and said it expected a second wave of coronavirus lockdowns to have only a limited impact on claims.
The corporate-focused XL Group, which reported a loss in the first half of the year, has raised its renewal prices by 20% in insurance contracts and 10% in reinsurance contracts, AXA said.
“We want to be sure that … we allocate capital to where we want to grow. It’s important that XL is able to seize opportunities, while there has also been losses linked to COVID this year,” AXA CFO Etienne Bouas-Laurent told reporters. “We have an intention to increase the capital at XL in this context.”
AXA’s solvency II ratio – which measures its capital strength under European Union rules for insurers – remained stable at 180%, Reuters reported. The company’s revenue fell to €73.4 billion (about $86 billion) in January-September.